The Boehner Boomlet

Yesterday the Dow closed above 13,000. Today the NASDAQ index is flirting with 3,000, bank lending is reported to be strengthening, and last quarter’s GDP growth has been revised upward, albeit to a rather anemic 3.0 percent. All good news, even if in the one swallow looking for a summer sense. The White House and its media propagandists are already cheering. But there’s something curious about their cheer.

For the past year, as the President has been telling us for about a year, his policies have hit a stone wall in Congress. Except for the minuscule payroll tax cut, Administration economic initiatives have gone nowhere: The Bush “tax cuts for the wealthy” have continued; there’s been no “second stimulus”; the growth in federal spending has decelerated. Basically, the government has put itself on autopilot instead of trying to steer the economy. All because of those Do-Nothing House Republicans. Yet the economy has improved!

Post hoc non propter hoc, I know. Still, there’s this:

The President demanded and got a near-trillion dollar “stimulus” that, he said, would keep unemployment below eight percent and bring it down to not much over six percent by early 2012. Now, with that number at “only” 8.3 percent (partly because labor force participation has been declining), he explains that his experts didn’t understand the true state of the economy three years ago. Nor did they understand it two years ago, when they touted “Recovery Summer”. Nor one year ago, when they warned that John Boehner’s intransigence would lead to disaster. But of course they understand it now.

On the other side, conservative economists declared that the stimulus wouldn’t improve conditions much and might make them worse. Their cavils were accurate. Maybe that was just happenstance, or their principles have a closer relationship to reality than Barack Obama’s.

The “Boehner Boomlet”, as we ought to call it, isn’t likely to turn into a full-fledged boom – not with tax increases scheduled for January of next year, the impending layoffs of over 100,000 soldiers and Marines, rising energy prices, an inflationary monetary policy (so far dampened by the public’s disinclination to spend the excess greenbacks), further losses anticipated from crony capitalist “green” subsidies, and the prospect of Obamacare. Nonetheless, let’s give credit where credit is due. Sometimes “don’t just stand there, do nothing” is better than a number of more frenetic alternatives.